Investigation launched after city manager expresses concern with activity by former Virginia Beach lobbyist

Local News

VIRGINIA BEACH, Va. (WAVY) —  A special prosecutor has been appointed to look into allegations that Virginia Beach’s former staff lobbyist helped secure a contract with a company that he was in negotiations to start working for. 

A spokeswoman for Commonwealth’s Attorney Colin Stolle said that Spencer Morgan, the commonwealth’s attorney for Accomack County has been asked to be a special prosecutor in a probe into Bob Matthias. 

Matthias, 71, denies doing anything to warrant an investigation. He retired in December from the city after a 40-year career. However, an internal audit found Matthias may have been lining up his post-retirement job long before that.

In an internal memo dated January 20 obtained by 10 On Your Side, City Auditor Lyndon Remias wrote that he began looking into possible ethics violations of Matthias, following concerns brought by recently installed City Manager Patrick Duhaney.

Duhaney was concerned that in May 2020, Matthias helped secure an $87,000 contract with lobbying and governmental affairs firm Principle Advantage, and subsequently started working for Principle Advantage while he was also working for the city. 

This could be seen as a violation of the Virginia Public Procurement Act (VPPA.) 

According to the memo from Remias, no public employee should be overseeing the procurement transaction for a public body if they have an arrangement for prospective employment with the contractor. 

In addition, Remias pointed out that city code prohibits a city employee from having a relationship with any company that they had a role in overseeing for a period of one year after their employment ends. 

Matthias, whose official title was assistant to the city manager, oversaw the city’s legislative efforts in Richmond and Washington for years. 

Remias found that in May 2020, Principle Advantage was awarded a contract with the city to help them with their lobbying efforts. 

Prior to Matthias’ retirement date, which was officially Jan. 1 of this year, Remias found evidence of Matthias sending emails on behalf of Principle Advantage, from a Principle Advantage email address.

An email sent Dec. 17, 2020, included in the auditor’s report to Duhaney, included a screenshot of an official email signature with Matthias’ name above the Principle Advantage logo. 

“Based on my review of this matter we confirmed that while overseeing the contract of Principle Advantage, Mr. Mathias (sic) began arrangements and negotiating future employment with Principle Advantage prior to his retirement with the City,” Remias said in his memo.

Remias then confirms with company CEO Angie Bezik that there were “discussions and arrangements of employment” to hire Matthias in Jan 2021. 

However, Bezik asserted to Remias in a letter that despite the official email signature and address linking Matthias to her company, Matthias “is not an employee, has not been an employee, and will not become an employee” of her firm.

Instead, she said in her Jan 7 letter to the auditor that her intention was to get things “set up for a quick start,” such as email and payroll. She said everything has been terminated with information about the city code and that Matthais had been informed.

Bezik did not immediately return requests for comment when contacted by 10 On Your Side.

Remias told Duhaney that he would be passing off the criminal concerns off to the Commonwealth’s Attorney’s Office. He also recommended Duhaney determine how the Principle Advantage contract was allowed to be “sole-sourced” meaning a request for a qualified government relations firm to partner with the city was not sent out to everyone. 

Duhaney said in response the Principle Advantage contract expires in June and new request for proposals for a legislative liaison was being worked on. He said the purchasing department had “identified the root cause and has made operation changes.” Duhaney did not elaborate as to what that cause was. 

Through a spokesperson, Duhaney declined to comment, citing the issue as a personnel matter. 

When reached by phone, Matthias denied any wrongdoing and said he did not know about any ongoing investigation.

“No, I have not been informed by the city about anything,” Matthias said. 

He added that he consulted an attorney last summer before considering any employment opportunities post-retirement. 

Matthias was recently honored in a resolution in the Virginia House of Delegates for his work. 

He has been lauded for helping to maintain the Base Realignment and Closure (BRAC) Compliance Program and Oceana Land Use Conformity Committee. He also is described as being a champion of alternative energy for his work in securing wind development off the coast of Virginia Beach.

He was also honored during a City Council meeting in December where he said “working for y’all and working for the citizens has been a great pleasure and indeed an honor.”

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